came in one day without a note and just chiseled us on highway legislation. he didn't -- he was a man of passion. he was who he was. no facade, just him. and he was rare and real. >> cnn will have complete coverage of the reagan centennial celebration. john king is anchoring live from the reagan library in california. coverage begins at 2:00 p.m. eastern. thank you for watching "state of the union." i'm candy crowley in washington. up next fareed zakaria gps. >> this is a special edition of gps, the global public square. welcome to all of you in the united states and around the world. i'm fareed zakaria. we have a terrific show. first up, the latest from egypt, we'll talk to reporters stationed in that country. i will also bring you interviews with two important egyptian

voices with different views. elbaradei might be the closest thing egypt has to a leader of the opposition. ever since the crisis started, he's been saying mubarak has to leave. but mubarak is still there. what's the next step? then a unique insight into the mind of the egyptian government. rasheed mohammed was the trade minister. he'll talk to us about what is going on in his country. then, you heard last week what british prime minister david cameron thinks about egypt. today you'll hear his thoughts on the crucial question everyone is watching. can you cut deficits and get economic growth? he also talks to me about everything from europe to the royal wedding. first, my thoughts on egypt. a specter is haunting the west and it is the spector of iran. the analogy everyone has in mind, 1979, the fall of the shaw

of iran and its replacement with an islamic republic. this fear comes from all over the political spectrum. if you listen to the more than conservative voices you think they are become to become the center of a knew cal fate. there is some danger events could spill out of control and nasty forces could come to power and seize control of the state. but egypt has many elements within the state and within its society that will check the role of islamic forces. the muslim brotherhood, the leading islamist party is thought to have the support of 25% of the population. and most of the other political groups in the country are secular. now the danger of some imagined future has blinded us to the present, military dictatorship.

since 1952. all of egypt's presidents have comed from the armed forces. military leaders enjoy huge privileges and a fat budget in the current setup. and they will work very hard to preserve that position. in fact, right now what appears to be happening is a conso consolidation of military power. civilians and business leaders in the cabinet have been fired and new cabinet is 50% military. the governors of egypt's provinces are 80% military. the military leadership has economic reforms because the reforms threaten the industries which the army owns. it has also opposed political reform because it fears losing its tight grip on power. while having decided to sacrifice mubarak, the military intends to say formally in power. what egyptians out on the industry are protesting is not just mubarak personally, but the whole system, the military dictatorship.

if the united states is seen as having helped or chess straight a continuation of military rule under a democratic facade, we will deeply disappoint the frustration in egypt which will turn more extreme and more religio religious. then some years hence, the iranian scenario might well come to pass. you can read much more about what i think about democracy in my cover story in this week's "time" magazine and on time.com. up in just seconds, elbaradei and then david cameron. let's get started. mohammed elbaradei is one of the best known egyptians on the world stage. the world's nuclear watch dog, atomic energy, and one of the

leading voices of the opposition. >> you have been very clear that your demand as a leading figure of the opposition is that president mubarak has to step down. but omar suleiman has said unequivocally that the president will not step down. the president obama's representative sid the said the president must stay in office in order to steer changes through. it appears that president mubarak is going to stay. what happens next? >> well continuing the standoff. i think the people are very clear that mubarak has to retire, in dignity but he has to go.

there's a huge question of credibility. people have no credibility, if he doesn't leave, the regime would retrench and then come back with vengeance. and you hear different voices. very clear he should go. he has to make care of the statement saying mubarak must stay, which created a lot of disappoint here in egypt. people who are very happy with barack obama's statement that the time is now. mubarak will be stubborn but it's not really a person of issue, it's an issue of the country. people want to see a new regime and mubarak to step down is a clear indication that we are on the throws of the second republic if you like.

unless he does that, we will continue the stand off. people are very determined that he should leave. and also, fareed, that the whole process of transition should not just be managed by the outgoing regime, by his vice president and prime minister, all military people. but they have to be heavy engagement by -- by the civilians. we are not in the greatest situation right now. it's a very opaque situation. >> what leverage do you have? at some point people have to go back to work. you get a sense there is some degree of normalcy. protests are getting small every. isn't the regime hoping to outlast you? >> i think yes, i think that's part of the regime tactics. when people don't have enough basic needs enough to eat, they don't have the daily wage, that they will continue turn against

the demonstrators and say enough is enough. let's go on with our daily life. but the basic problem, fareed, as i see it, is not just president mubarak leaving office. it's a question of credibility. talking about fleeing -- that they need that the young people have been detained. i have nine people detained after meeting with me at my home. they were kept for a couple of days. just released yesterday. there is -- you get also the feeling that we are extracting wisdom too. they first come and say, we will change the institution and get additional pressure. then they will say we'll do another. but people don't get the feeling that they are really buying into change, into democracy. we haven't heard anything, fareed, about the ability to establish new parties really, so

huge parts of the problem is people, the young people in particular don't have any sense of credibility. that these people mean what they say. >> isn't another tactic of the regime to try to divide the opposition? and is it not succeeding, the watch party has already engaged in negotiations with suleiman and muslim brotherhood says they will talk with them. is the opposition fracturing? >> i'm not -- i don't think i am isolated. i'm one of many parties that -- particularly the people that are camping in the tahrir square and other parts of the egypt. they are determined that they'll continue this week for resistance. and they will have a huge demonstration today on wednesday, on friday.

and so it is complete standoff. and i hope somebody will send the message to president mubarak for the sake of the country, for his own dignity to defuse this crisis, he better step down and everybody is ready to give him the dignified out he is entitled to as former president of egypt. he needs to go. you need to engage the civilians. it should not be just the military. people are not believing that and any feeling people will get that there is an effort of the peaceful revolution, it will turn violent. >> you are saying under no circumstances unless mubarak resigns will you negotiate with the regime? >> i'm ready to express my views but i'm not ready to negotiate

with the representative of mubarak. the whole idea was to move from that regime to a new regime. mubarak continues to be a symbol of that old regime. and i will not give any legitimacy of that existing regime because the whole idea is this regime has no -- has lost the credibility. and yes, my position remains the same, that i will not talk with these people until mubarak steps down. >> and what specifically happens then? a number of people have pointed out under egypt's constitution then the speaker takes over, not the vice president. you have national -- presidential elections triggered in two months. do you want all of that to happen? how do you abort that process? if mubarak is to resign, it sets in chain a set of transitions

that many people say would be destabilizing. >> i think what i'm calling for, fareed, is for three people, somebody from the army would be one member. the other should be civilian, a year of transition of a government of national unity, of caretaker government that prepared properly for a free and fair election. any election in the next coming months for people to establish parties and engage, it will be again, a democracy. we need transitional government. we need a presidential -- we need to abolish the present institution. we need to dissolve the kind of parliament. we should not -- i don't think we will go to the democracy

through that dictatorial constitution. my expert on constitutional law said the easiest way to start an new era with an interim constitution and set aside the parliament which is rigged and the constitution which has nothing to do with democracy and give ourself a year for the peaceful and safe transition. then we will get a proper president and proper parliament then again a full fledged democratic institution. that's the way i see it. >> a pleasure to have you on. thank you so much. up next, the latest live from egypt, major protests in cairo and alexandria and more.

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cnn's nick robertson is live in alexandria. we've been talking about this issue of dividing the -- and you have spoken to people on the street who have spoken about the same thing. >> reporter: there's a real frustration here, fareed, a frustration several levels. one of those is that a lot of the young people we talked to feel that their great revolution is being -- by muslim parties waiting in the wings to ride this wave they've been able to build up. they are frustrated and don't feel they are being properly presented. some of the other groups feel what the government is trying to do as well at the moment is try to buy time through political sha canary and hope it can outmaneuver this great movement of protest.

they feel the government in its way of doing that is to divide them and conquer them. by appearing to give some concessions, they feel the government is in effect trying to buy some of them off. we're actually seeing the effects of that on the streets, people saying, look, there's been too much chaos now, the government has given us a little. he won't stand again. that should be enough. it's those kind of divisions that are now pulling real anger on streets here, fareed. >> a fascinating turn in the story. up next, a former member of president mubarak's cabinet. what is going on in the corridors of power did egypt? i got into one of the best schools in the country!

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rashid mohammed rashid was the first business leader ever in the egyptian government. he was one of the liberal,

so-called reformers, nine days ago he lost his job. egyptian prosecutors have since banned him from traveling and frozen his assets. he offers a rare insiders look at the highest levels of the egyptian government. >> do you think president mubarak was disappointed by the fact that president obama has in the end asked for him to resign? >> well, i can tell you now, not an official person, i can say whatever i want to say. i think the position of president obama and the president of the american government was extremely shortsided. i don't to say stupid. so much interference, they shouldn't have gotten involved in this. at the end of the day, the record of the united states interference in many of the events in the past have showed how disastrous it has turned out to be. it is positive for the rest of

the world to support egypt in making the democratic transition, but i think it is not in the right of president obama or the american government or any other government to dictate on egypt what to do. >> if mubarak leaves, the military stays, the regime stays in power, the ones who oppose the reform stays in power. does anything change? >> well, i personally believe that the best scenario for egypt is for president mu bbarak to sy and finish his term. it is a very clear and strong message for the transition. since his speech action have been taken on the ground. i believe that egypt needs that transition. i believe that mubarak can do that transition. i personally believe that he will pick towards this changes to be done. and we know it's not easy. but i believe the alternative is

chaos and alternative is just jumping into the unknown. and i believe that he has the will to do that. that is a lot of people that has changed in the past few days. so many faces that have been removed. we have some promising faces but we still, of course, have a lot of resistance and still have people who assume that things will go back to normal but they will not. egypt is a great country. it has a great young population. it has a great future and i think it is time now to let the future happen by the young people, not by -- >> why did you not join the government that was created about a week ago, the old government was fired but you were invited to join the new one. you chose not to. why? >> well, the reality, of course, was that we had to resign the old government on saturday. on sunday the new prime minister asked me, invited me to join the

government. i personally felt that what is happening in egypt now and the consequences of the events of the last few days will probably need a new direction. the prime minister has his own views about what he would like to do. he has a right to choose new faces and has a right maybe to change some of the policies. and that was the reason why i presented to him my apology and he gracefully accepted that. but even after that discussion we had a lot of discussion about how to help him to set up the succession. but i was very clear that what we are going to face in the next few weeks is going to be different from what we had in the past. >> but then you face these prosecutors' investigations. do you have any sense -- are these an attempt to in some way keep you quiet? what do you think is behind these prosecutor's charges? >> i don't know.

i have all respect to our prosecutor but i only know one thing. if i was a minister in egypt on sunday or monday morning, i would not have had that situation today. but i believe that this thing will be cleared and i know that the general prosecutor will be dealing fairly with all of the issues here. >> do you worry about the people out on the streets? do you worry that this is a muslim brotherhood movement that will take over the country and turn it into a kind of islamic state? >> well, we have many challenges. it is well known that there is, of course, a strong muslim brotherhood movement. we are all aware what is the agenda that they are. but i generally believe that what we have seen in the last ten days have been initiated by the young people of egypt that will probably as i said were restricted despite the political reform that have been happening of having a voice and share.

the system not allowing them enough -- we have made so many political changes in opening everybody. everybody knows the facebook have been one of many important factors that made this happen. but facebook was an outcome of the political reform. egypts have never restricted internet and opened up freedom of speech. i think we need to trust now in the young people of egypt and need to trust in the positive spirit that have been created. >> you said a few days ago that these events have taken egypt's economy back ten years. that's a pretty grim prognosis. do you think it will take that long to get back to where you were? >> well, fareed, business needs stability. business sneeds clarity of direction and positive environment. today we don't have any of those. i believe egypt has a huge potential. we have worked hard in the last six years to develop a economy.

many people around the world have seen the proof that egypt can deliver. and today the challenge is first to resume law and order. we need to bring law and order back into the country. we need to bring back security into the country. we need to give the right messages to the business in terms of business environment. and that is probably one of the challenges now, especially when many business people are under attack. but also more important than that, we need also to prove that the transition will be smooth. that's why i believe president mubarak is key to that. we need to ensure the business community that at the end of the transition, egypt will be stable, democratic and economically business friendly society. >> ra chid mohammed rachid, pleasure to have you on. next up we'll take you to tahrir

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demonstrators in cairo are still out in force today. ivan watson is in cairo. the mood appears to be upbeat. you tell me there were reports of growing concerns about the role of the military? >> reporter: that's right. the mood here is absolutely festive, fareed, it's remarkable. we had a show of solid dart between christians and muslims where men held up stages and copies of the koran at the same

time. that's remarkable in a country where tensions exploded between muslims and the christian minority within the last month. we have people who have been putting out clig fee using the same stones that have been used for battle to protect this opposition anti-mubarak pro-democracy, making the stones to make street art instead. there are serious concerns here too about the role exactly of the military, the pro-mubarak demonstrationers clashing here, instead they have directed themselves against the army. they have built a human chain outside the bar okayeds to prevent the egyptian military, to prevent the tanks from being able to roll in and take down

the barry okayeds. the army is supposed to be neutral here. you frequently tell me the army and people are one hand. this a common catch phrase in egypt. the demonstrators say yes, but the army takes orders from president mubarak and do not trust him if he tries to open the way here, it will end our bubble or enclaf here. amid talk of dialogue and opening up the media and remove s censorship here. i just heard word that a correspondent for al jazeera ra english has been detained by military intelligence, one of dozens detained in recent days here. >> fascinating reporting, thank you so much. back in just a moment with the british prime minister, david cameron. >> when winston churchill was

prime minister, are you the prime minister who will preside over the liquidation of britain's role? >> i'd like to take this opportunity, ma britain is maintaining his role and is a front player and will remain so. it flows with clean water. it makes its skyline greener and its population healthier. all to become the kind of city people want to live and work in. somewhere in america, we've already answered some of the nation's toughest questions. and the over sixty thousand people of siemens are ready to do it again. siemens. answers. ♪ when it's planes in the sky ♪ ♪ for a chain of supply, that's logistics ♪ ♪ when the parts for the line ♪ ♪ come precisely on time ♪ that's logistics ♪ ♪ a continuous link, that is always in sync ♪ ♪ that's logistics ♪

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shortly after moving into 10 downing street less than a year ago, british prime minister david cameron and his government began a bold experiment, set out to prove the way to dig britain out of the economic problems was to raise taxes, of course, in contrast to what is being done in the u.s. will it save britain? recent growth numbers have been bad. i sat down with david cameron last week to ask him about his efforts. >> thank you for joining us. >> good to be here. >> when winston churchill was prime minister he said, i have not become the king's first minister to preside over the liquidation of the british empire. are you the prime minister who will preside over the liquidation of britain's role. if a look at your defense

budget, it's being hollowed out. understandably you have these cuts, you wouldn't be able to do afghanistan or iraq again -- >> i don't accept that for one single moment. i'd like to take this opportunity on a u.s. television station to say clearly britain is maintaining its world role. we're maintaining it in cash terms. our defense budget, 35 billion pounds is moin takened through this parliament. but we ril remain one of the five biggest spenders in the world. one of the best resource networks and british council anywhere in the world. we have huge reserves of hard power and soft power. we're actually spending more in terms of combatting cyber security problems. we have one of the most powerful and respected aid budgets in the world. don't understatement that. so often the problems we're

confronting, whether floods in bangladesh or problems in haiti, require aid as well as hard military power. britt inis a heart ranked power where every single one of key organizations whether it's nato or the commonwealth, our relationship with america i believe is as strong as ever. nine months into this job, i believe that relationship is at heart incredibly strong, not just because of what our forces do fighting and sometimes dying together, but also the security relationship where our assets and your assets work absolutely in harmony. information is shared and president obama and i are on telephone talking about the threats we face and how to combat them together. britain is a front player and will remain so. i would argue that our defense review took difficult decisions and said there are legacy assets you don't need. you don't need so much tanks when you're not facing a soviet

army that will roll across europe. change makes you stronger, morrell vant and more powerful in the world. >> do you think the military tide is turning in afghanistan? >> i do think we've made progress. one of the most important parts of that is in helmand province where we are, the hardest part, after america we are the second largest contributor of troops. we are making progress and that is again, u.s. marines and british forces working together, far better balance of forces and much more the right number of forces and i think demonstrating security is improving. but the ticket for president obama and for me to bring our troops home is the training of the afghan army and police which is going well. we need to keep that progress growing and need a strong government in afghanistan to help deliver that change. i believe those things can be done and we'll be able to do to meet our deadline of not having combat troops or troops by 2015.

>> the british economy is going to center into a recession, that t contraction policies will have to be reversed. he has a good track record of betting for and against governments. does he worry you he feels this way? >> i think we have an important task to carry about, to get the uk economy into growth, we're making progress with that but we can't ignore what is in front of you, which is the biggest budget deficit of any advanced country. and we're borrowing more than 10% of our gdp this year. like the rest of europe, the ratio debt to gdp is growing fast. when you look at forecasts for the u.k. economy, including our own, which is totally independent of government, those forecasts are for continued growth. obviously we need to get behind that growth and help business

cut regulation, make it easier to do business. but really part one, line one of any growth strategy in our situation has got to be dealing with the deficit and not putting it off. >> a number of economists say nobody economies that you needed to cut spending. the question is when. and that you were not having any trouble raising money from the bond markets and britain was finding it easier to borrow and yet you preem tifly made this decision. could it be it was too fast? >> first of all, if you go back to may when my coalition government came in, at that point actually people were suggesting that our credit rating could be downgraded. there were potential problems of rises in market interest rates. actually since we announced our deficit reduction plan, those market interest rates have actually come down and our credit rating has been reassured at aaa. i don't accept that. the second point i make, if you

look at what the program is, it is about reducing the deficit, taking some steps as we did in 2010, further steps in 2011, more in 2012. sts a multiyear program. you obviously can't get rid of a 10% budget deficit in one go. it is a multi-year program and accompanied by a government that is really looking at everything it can do to encourage growth. i'm convinced that's the right answer. it's an answer we have to stick to and deliver. and it's an answer that also has widespread support, not least most recently from the ocd and bank of england who say it is a difficult task to engage in because you have to rebalance an economy that was the most indebted households and biggest government deficit, you've got to take that economy and rebalance it to be more dependent on experts and manufacturing and trade and more balanced economy. it's not an easy task and will take time but we're doing it, i think in the right way.

>> president obama seems to be going in a different direction. in his state of the union he laid out a plan for america, which stressed the importance of growth and growth through innovation and investments to get the growth in science and reresearch and technology and infrastructure then he got to deficit reduction. do you think he's handling it wrong? >> first of all, america is different. it has a reserve currency and britain is not in that situation. the second point is that america is looking at reducing its deficit and has to do that. i was talking with tim geithner on the way to the interview and made exactly that point. there are differences but sim larlts. the real similarities are both countries recognize they have to clean up the banks and deal with that and pursue innovation and growth and make sure we're ingesting in science. even as we're making cuts, we're protecting the science budget and boosting apprentice ships and cutting welfare roles to put

money into pro ductive capacity. we're doing it in a way that supports growth. >> bob diamond says that the british government is still too tough on bankers that are adopting a punitive ap tud to bankers and you need to cut this out. >> i would say we're developing a common sense attitude. everyone involved in the banking statu industry has to understand, that the banks were partly responsible for the mess we are in. when they see money that's gone from the taxpayer into the banks going into large bonuses, that naturally makes people very angry. the common sense approach we're taking, i do not want to have an endless battle with banks and bankers when i'm trying to get the economy to grow. let us have a settlement where we see what we want to see in britain. that the banks pay more in taxes. let's see the banks do more in

lending and they should and the bonus pools come down as they ought to. there is actually a settlement we can reach that says we're going to stop this endless war of attrition but it's gotting to done on the basis of banks being good socially responsible citizens and lending to the businesses that need the money and being responsible in terms of pay and making the contribution. i'm interested in the amount of taxes they pay to support growth than i am in having phony arguments about building up new retax regimes. >> it sounds like you think they not doing what they want. >> i think they are making progress. we're having discussions with the banks in the uk. we're sitting around a table with the main banks and talking with them about our ambitions on bank lending, particularly to small businesses about what we think needs to happen in terms of bonus pools and also this issue of the totalment of tax

the banks are going to pay. on left in british politics who think the only answer is to keep hammering bankers with a new tax. if you look at the tax they are paying this year, it will be more than last year and looking at 120 billion pounds of tax from the banks over this far limit. that's what i want to see -- it's the contribution they make that is going to be how i think we should judge whether we have a successful approach. >> back in a moment. more with british prime minister david cameron. i ask him about the royal wedding. >> but you don't have to approve the budget? >> we'll discuss the issues but they are family -- i obvious hi have weekly meeting with her majesty the queen. they are secret. i would have to kill you if i told you anything we discussed. good night, stuffy. >> ( yawning ) >> good night, outdated. >> ( click ) >> good night, old luxury and all of your wares. good night, bygones

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basic. preferred. at meineke i have options on oil changes. and now i get free roadside assistance with preferred or supreme. my money. my choice. my meineke. we are back with more of my interview with british prime minister, david cameron. >> is britain prepareded to play its part in rescuing europe if you end up in the next few months and there's likely to be bond auctions in a situation where the vulnerable countries

from greece, portugal, perhaps spain need a package of support? germany would be the critical country but many people think britain needs to step up as well. >> i don't want to speculate about other countries doing their best to deal with their problems. britain is not a member of euro, we were right not to join and while i'm prime minister will not join. clearly the case of ireland, they are an old friend and very strong partner for the united kingdom and right for us to make that bilateral loan to help them, we are involved in one of the funds in europe, the so-called financial mechanism, that was set up before i became prime minister. there's a liability we have under that. but the new financial arrangements put in place for europe for the future don't involve britain and the arrangements will be put in place for a treaty change also

don't involve -- that's right because we don't have a say over policy pursued in portugal or spain or other countries. if you're not in the euro, you shouldn't have to make contributions to the fund and i think that's a right way of going about things. >> you're ruling out the pro spes inspect of them rescuing the european countries that need help. >> we have a liability under the existing mechanism -- >> but beyond that? >> i believe if you're not in the euro, you should not be compelled to go to the aid of other countries when that might be connected to their membership of the euro. i think it's a pretty simple rule in life if you're not a member of a political job and don't have the same liabilities to other members of that club. we took a clear decision. we want to euro to succeed. i won't stand in the way of euro action to sort out the problems they have because britain will benefit from that.

we chose not to go into the euro for good reasons. i'm glad we're not. i think we have greater flexibility to respond to the problems right now in our economy. but i want the euro to succeed. i won't stand in the way of changes that they'll need to make. >> prime minister, you're pushing austerity measures on everyone, everyone is being very frugal. you face an upcoming royal wedding. is it going to be a budget wedding? >> no, it will be a royal wedding, the whole country can celebrate. obviously the government will make its own contribution in terms of policing and security and rest of it but the royal family will be in charge of the plans. i think it will be. >> you're not paying for it? >> we pay for certain parts and the royal family pay for other parts. i think it's going to be great for britain. they are a wonderful couple. >> you don't have approve the budget? >> we'll discuss the issues but the royal family -- i obviously have weekly meeting with her

majesty the queen, they are absolutely secret. i would have to kill you if i toll you anything we discussed. but i know it will be a huge success not just for the country and world looking at britain and how we have this wonderful royal family with the prince william who i've spent time with, is a remarkable young man, great balance and poise and one day will make a wonderful king. the world will be looking but we'll be proud of it in the uk. it's two young people who love each other very much and getting married and we should be happy for them. >> have you seen the couple since thep announced the engagement? >> i spent time with william in europe when we were trying to bring the world cup home for england. i'm afraid we were unsuccessful as the u.s. was in bringing the world cup home for the u.s. we spent time together and talked about his plans. it was great to hear when someone is getting married, the

enthusiasm and excitement. i could very much feel that. >> did you give any words of advice as a married man with some experience? >> if i did, i certainly wouldn't tell you what it is. >> prime minister, pleasure to have you on. >> pleasure. she felt lost... until the combination of three good probiotics in phillips' colon health defended against the bad gas, diarrhea and constipation. ...and? it helped balance her colon. oh, now that's the best part. i love your work. [ female announcer ] phillips' colon health.

we're back. if there's one book you need to read to understand what's going on in egypt, it is "egypt after mubarak" by bruce rutherford. it's a great look at the political forces now in egypt, the mubarak regime and opposition both secular. a few of my final thoughts, the story in egypt is moving into a fascinating phase. the regime recognizes that things will have to change but it w